Do you like sports? Would you like more sports and less cable?
A record number of households are dropping their cable and satellite TV subscriptions, so sports behemoths Fox, ESPN (a Disney unit), and Warner Bros. Discovery are combining their offerings into a single online, off-cable bundle for what is likely to be $50 a month (before any discounts). Sound like a bargain? Not really, that’s about what you’d pay on top of your monthly Internet bill for a cable subscription with the sports channels, anyway. The three will split revenues and continue to pay the pro leagues for air rights. Notably absent is NBC, which hosts the Summer Olympics and Sunday Night Football. The combo might help the three networks fend off sports challenges from the deep pockets of alt-broadcasters Amazon, Apple and Netflix. But will the fans buy it?
Oh boy, another banking crisis?
New York Community Bancorp stepped up last year to buy the assets of Sterling Bank, a small New York lender focused on real estate, which went belly up in 2023’s regional bank crisis. Now the same exposure to commercial real estate that brought down Sterling is threatening NYCB and other regional banks. NYCB’s stock plummeted 56% after it revealed massive real estate exposure on Jan. 31, raising fears more small banks will be hit by a new commercial real estate crisis. But the stock recovered 7% on Wednesday, and after putting its board chair in charge, NYCB said it could weather the current storm. Still, with some $2.7 trillion in commercial real estate loans held by U.S. banks, the continued reluctance of many workers to go back to the office signals that skyscrapers have yet to scrape the bottom.
Adam Neumann says he’s going to buy back WeWork. Uh, really?
As if losing $47 billion wasn’t enough, WeWork founder Adam Neumann says he’s teamed up with Third Point hedge fund manager Dan Loeb to try to buy back the flexible workspace company that crashed so spectacularly even before the Covid pandemic sent workers fleeing from offices filled with strangers' germs With hundreds of millions of dollars in leased space and a decreasing roster of tenants, Neumann’s vision of shared offices with flowing taps of kombucha failed to make a profit, and he was forced out in 2019. Now Neumann says he has a team ready to buy the company out of bankruptcy, DealBook and Bloomberg reported. But Loeb says he hasn’t signed on to anything, and WeWork’s future is looking about as bright as the unplugged computer screens in a shuttered WeWork space.
Disney boss: There’s still magic in our castle!
CEO Bob Iger has some more big ideas for Disney, and it looks like they may be convincing skeptical investors and analysts. When Disney reported revenue slightly below expectations on Wednesday, the market ignored the miss in favor of a planned $7.5 billion cut in savings expected by year-end, and adjusted earnings of $1.22 per share, a massive beat on the expected 99 cents. The stock spiked more than 6% in after-hours trading. Beyond the new sports cable bundle with Fox and Warner Bros. Discovery (see above), Iger is promising an undefined “pivot,” based on turning a profit on Disney+, which now includes Taylor Swift’s Eras Tour concert film, majority ownership of Hulu, strong post-Covid results from theme parks, and a planned Moana feature movie this fall.
Aw, Snap: Snap’s value is tanking about as quickly as a Snapchat fades away. On a fourth-quarter revenue miss of $1.36 billion, just a whisker below the expected $1.38 billion, the social media company’s shares dropped 35% on Wednesday, and the company says the current quarter is likely to see a loss in earnings that could be as high as $95 million, nearly triple the $32.7 million loss that analysts were expecting. The reason: Analysts say Snap lacks the deep pockets of its rivals to monetize AI engagement, giving it less fairy dust to attract advertisers.
Burned Burgers: The Covid epidemic didn’t faze McDonald’s, but the Israel-Hamas war in Gaza is harming hamburger sales around the globe. Boycotts at McDonald’s linked to Middle East turmoil meant slower than expected growth. McDonald’s reported revenue rose 8% to $6.41 billion, falling short of the $6.45 billion that some analysts expected. Same-store sales grew 3.4%, also falling short of the 4.7% estimate.
Flying High: Spirit Airlines, in what the company hopes will be its last full-year earnings report, said it plans to fight regulators and merge with rival Jet Blue, sending shares up 2.5% despite a 5% drop in revenue, matching analysts’ expectations. While the stock is down 56% so far this year, and a problem with its jet engines is grounding a large chunk of its fleet, Spirit says it expects to close its $3.8 billion merger, despite a recent court ruling blocking the combination.